The company is combining the Gulf of Mexico interests of the two companies, gets long-lived assets in California from PXP, and gains exposure to the Eagle Ford Shale. [Read more…]
PXP is increases its spending in South Texas by $110 million in 2012 in response to operational efficiencies that have led to significantly more Eagle Ford drilling than planned. Original plans for 2012 called for the drilling of 83 Eagle Ford wells, but Plains is on pace for 148 wells. I’d say they might have been a tad bit conservative in their early projections.
Higher spending in the Eagle Ford Shale is leading to an approximate 78% increase in wells drilled and a 25% increase in average daily sales volumes over the 2012 base plan.
PXP plans to drill 124 wells next year, but don’t be surprised if they outperform that number too. The company is already planning for cost savings of $500,000 per well on the service side. That will drive well costs down to ~$8 million. Any additional savings in costs will allow the company to invest more heavily in development. Operational efficiencies don’t really ever hit a limit. Operators might start measuring hours instead of days, but there are always improvements that can be made. Shave 10% more off their drill time and PXP could drill closer to 140 wells next year.
In the Eagle Ford Shale, third-quarter daily sales volumes averaged 30.4 mboe/d net to PXP compared to third-quarter 2011 average daily sales volumes of 5.2 mboe/d net to PXP. At the end of October, PXP had 7.1 net drilling rigs operating on its acreage and 35 wells drilled but waiting on completion or connection to pipelines. PXP expects to exit the year producing between 32 – 36 mboe/d net.
Plains Exploration & Production (PXP) delivered strong Eagle Ford production growth numbers. The company averaged more than 25,000 boe/d in the second quarter, up from just a little over 2,000 boe/d for the same period in 2011.
CEO James C. Flores commented:
“We had an impressive quarter with continued robust Eagle Ford expansion and solid California operating performance demonstrating the strength of the Company’s underlying oil asset base………In the short-term, PXP is providing stellar execution of its Eagle Ford growth plan. We are not only seeing strong production growth but also beginning to see efficiencies across all aspects of our Eagle Ford activity.” [Read more…]
Plains Exploration and Production (PXP) produced an average of more than 9,000 boe/d from the Eagle Ford Shale in the fourth quarter and added more than 22 million boe of proved reserves during 2011. The company’s acreage is primarily located in the oil and gas-condensate windows in Karnes County. [Read more…]
Plains Exploration and Production pays $578 million ($9,600 per acre) to adds Eagle Ford Shale acreage. The properties are located in the liquids-rich gas condensate window of the Eagle Ford and approximately 20,400 acres overlap a joint operating area with EOG Resources.
“PXP has agreed to acquire interests in approximately 60,000 net acres in the Eagle Ford oil and gas condensate windows in South Texas for $578 million in cash. Of the 60,000 net acres, approximately 20,400 net acres are located in a joint operating area between PXP and EOG Resources, Inc. (NYSE: EOG). The Eagle Ford properties are located primarily in Karnes County of South Texas and have net resource potential of approximately 140 to 175 million BOE, projected net production capability of approximately 2,000 BOE per day and a year-end 2011 production target exit rate of approximately 5,000 BOE per day net to PXP.”
Read the press release at pxp.com